South Carolina's uninsured figures remain high

Decision not to expand Medicaid may be leaving many residents in coverage gap

Nov. 16, 2013

Written by

Mary Orndorff Troyan

Washington Bureau

WASHINGTON — Initial enrollment figures for the Affordable Care Act show South Carolina and other Southern states that didn’t expand Medicaid eligibility aren’t reducing their population of uninsured residents as quickly as states that did.

Figures released by the administration show many Americans who shopped for insurance on the new online marketplaces wound up qualifying for Medicaid, especially in places that expanded the pool of people eligible for it.

For example, in Arkansas, 53 percent of people represented by applications completed on the federal online insurance marketplace — HealthCare.gov — between Oct. 1 and Nov. 2 were deemed eligible for either Medicaid or the state’s insurance plan for children.

In South Carolina, which did not expand Medicaid eligibility, only 15 percent of those people qualified for Medicaid.

That pattern held true for other Southern states.

Forty-four percent of people in West Virginia and 38 percent of people in Kentucky who shopped for insurance online — on HealthCare.gov in West Virginia and kynect in Kentucky — qualified for Medicaid. Both states expanded eligibility for the program. In Alabama and North Carolina, which did not expand Medicaid eligibility, the figures were 11 percent and 13 percent.

Those findings, while preliminary, illustrate how states’ decisions on whether to expand Medicaid are playing out.

The Affordable Care Act originally required states with meager Medicaid programs to expand them to cover anyone earning less than 138 percent of the poverty level, or about $27,000 for a family of three. But last year the U.S. Supreme Court made the expansion optional. South Carolina and 24 other states have declined to expand their programs.

It quickly became clear that not expanding Medicaid would create a coverage gap and that some people wouldn’t qualify either for Medicaid or for federal premium subsidies when buying private insurance policies on the marketplace.

That gap will affect an estimated 195,000 people in South Carolina.

(Page 2 of 2)

“This reflects the reality of the difference between covering adults up to 138 percent (of the federal poverty level) and covering them at very low levels,” said Judy Solomon, vice president for health policy at the Center on Budget and Policy Priorities. “It is a good illustration of the divide.”

South Carolina is one of 36 states using the federal online insurance marketplace, HealthCare.gov. Other states created their own online insurance exchanges.

So far, 11,249 applications have been completed in South Carolina for private coverage on HealthCare.gov, representing 20,980 people. Of those people, 3,112, or 15 percent, qualified for Medicaid or CHIP, the state’s Children’s Health Insurance Plan. Another 5,000 qualified for subsidies to help them afford private insurance.

There’s no way to know how many more applicants would have qualified for Medicaid had South Carolina expanded eligibility to cover everyone with income up to 138 percent of the poverty level, including adults with or without dependent children. And future enrollment data could change the proportion of applicants guided into Medicaid or CHIP.

Currently, for example, childless adults in South Carolina earning 75 percent of the federal poverty level, or $8,617 a year, will find they don’t qualify for Medicaid or for premium subsidies to buy private insurance on HealthCare.gov.

The Affordable Care Act was based on the assumption that Medicaid eligibility would expand in all states, so that only people earning between 100 percent and 400 percent of the poverty level would need subsidies to purchase private insurance.

South Carolina Gov. Nikki Haley chose not to expand Medicaid because of the financial burden to the state. Under the Affordable Care Act, the federal government pays the full cost of expanding Medicaid for the first three years, but its contribution gradually drops after that, eventually reaching 90 percent.

An analysis done for the South Carolina Hospital Association showed expanding Medicaid eligibility in South Carolina would have brought in $11.2 billion over the first seven years, but the state would have had to pay $442.2 million in matching funds, plus $192.6 million in new administrative costs.

The same analysis said the expansion would have provided coverage to an additional 333,000 people in South Carolina. In 2011, there were 764,000 uninsured in South Carolina, according to a study done for the South Carolina Department of Health and Human Services.

The agency also predicted that even without the expansion, about 162,000 people in the state would enroll in Medicaid who are eligible now but haven’t enrolled.

President Barack Obama continues to urge governors to expand their Medicaid programs. On Thursday, he praised Ohio’s Republican governor for doing so.

“As many as 275,000 Ohioans will ultimately be better off because of it,” Obama said. “And if every governor followed suit, another 5.4 million Americans could gain access to health care next year.”